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CME: US Beef Sector Exports Hit Near Record Year in 2017

US - US beef sector exports had a near record year in 2017, rebounding values placed 2nd behind 2014, coming in at just over $9 billion, according to Steiner Consulting Group, DLR Division, Inc.

Strong beef sales overseas were led by increases in beef and veal, which were nearly $1 billion more than 2016, followed by live cattle, which more than doubled in value. The US is a heavy exporter of beef and veal which totaled $6.3 billion in 2017.

Import values for the US beef industry fell by about 2 per cent with lower values across the board for live cattle, beef and veal, variety meats, and skins and hides. Imports have been the main driver in recent years behind the decline in net export values (i.e. the value of exports less imports).

In 2014 and 2015, imports climbed to nearly over $8 billion leading to a rapid decline in net export values. In 2017, that number moderated to $6.8 billion with the majority of imports falling into the beef and veal category. Beef and veal accounted for 72 per cent of all import values last year followed by live cattle, accounting for another 23 per cent.

It's important to keep in mind that markets are efficient and that product flows where it finds the most value. Imported and exported are not necessarily the same cuts, grade or price. In 2017, product demand was strong as well, and throughout the year cattle prices remained firm despite beef production climbing by 3.5 per cent gain year-over-year.

The US is historically a net exporter of beef industry products. The gain this year seen in net exports values was over $1.3 billion higher. With the exception of live cattle, beef and veal, hides and skins, and tallow, grease and variety meats all brought in more dollars to the US than imported beef products to the US market.

The total net export value of 2017 breaks out to about $70 per beef cow in added value. Although this number does not represent the loss of value a producer would incur should the US lose some of its trading partners, it is a broad indicator of the positive value of trade.